'Merger mania' sweeps Texas, Dallas

In the midst of Texas’ economic prosperity is roaring activity in its mergers and acquisitions market, with the state seeing its highest rate in years during the first half of 2014.

Reports by The Texas Lawbook dub the activity “merger mania,” stating Texas companies have announced at least 255 mergers since the beginning of the year. That’s 30 percent more than in the first six months of 2013. All told, 2014 deals total approximately $45.5 billion, according to data by Mergermarket.

And it gets better – M&A pace is supposed to stay or improve during the second half of the year.

Totals for the first six months of the year don’t include the big regional deal that’s grabbing attention across the tech world: an acquisition of El Segundo, California-based DirecTV by Dallas’ AT&T Inc. (NYSE: T). When executed, the transaction will be worth $67 billion, more than triple the amount of last year’s biggest addition, a $20 billion deal that privatized Dell Inc.

While this is good news overall for the Lone Star state, Dallas-based legal advisers are lending a big hand in getting the deals done.

Legal advisory firm Locke Lord has been responsible for more than $5.7 billion from 15 deals this year, ranking 17th in deals by value and seventh in deal volume. Last year the firm brought in nearly $7.8 billion through seven deals. Recently, Locke Lord was a legal adviser to National Oilwell Varco Inc.’s merger in May.

“M&A – particularly representing middle-market companies and private-equity backed companies – is one of the leading growth engines for Locke Lord,” said Bill Swanstrom, co-vice chair of the firm. “The first half of 2014 has been very strong in that regard, with every indication that the second half will be even stronger. We have several deals that we are working on right now, ranging in size from $25 million to $3-$4 billion.”

Haynes and Boone ranked fifth in Mergermarket’s data for number of deals, completing 19 in the first six months of the year. That netted more than $1.3 billion. Last year, the firm brought in nine deals.

“At the moment we’re managing multiple transactions and we have the depth to do that,” said Tom Harris, head of Haynes and Boone’s M&A practice group. “Our system makes it natural to get our specialists involved, and they’re well-educated on what’s important to our clients. We also think we have a practical group of subject matter experts that help achieve our clients objectives.”

Thompson & Knight also took 20th for bringing in seven deals valued at just over $2 billion.

The role of legal firms is becoming increasingly important in M&A deals, as they serve not just as legal representation, but in more advisory roles. They can keep deals on track, avoid missteps and let their clients know if a transaction is a financially sound, said Chad Watt, Southwest Bureau Chief for Mergermarket.

“More and more I think law firms are trying to play the role of not only protecting the company from doing a deal with terms that aren’t favorable, but they’re also playing a more advisory role,” he said. “They’re also offering advice on how this deal is going to come together the best way to get it to work. Mergers typically have several steps, and the way law firms add value is to make sure it’s a good deal and getting their client to the closing. Missteps can delay the process or end up in a broken deal.”